Dáil Éireann Debate, Wednesday - 26 September 2018
253. Deputy John Curran asked the Minister for Housing, Planning and Local Government if he has considered the establishment of a funding model that can utilise credit union funds to build, sell or rent social and affordable housing; and if he will make a statement on the matter. [38926/18]
Amharc ar fhreagraFollowing engagement with the credit union sector on proposals for credit unions to provide funding for the provision of social housing, the Central Bank undertook a review of the relevant investment framework in 2017.
On foot of this review, revised Regulations commenced on 1 March 2018. The revised Regulations included the addition of investment in “regulated investment vehicles where the underlying investments of the regulated investment vehicle are investments in Tier 3 Approved Housing Bodies” as a permitted investment class for credit unions. As such, since 1 March 2018, credit unions are permitted to provide funding, through a regulated investment vehicle, to Tier 3 AHBs for the provision of social housing.
In respect of the development of specific Special Purpose Vehicles (SPVs) by the credit unions to enable them to make investments in the sector, it is a matter for the credit unions themselves to make the necessary arrangements to facilitate this.
My Department did inform the Credit Unions' representative bodies that it was funding a project being undertaken by the Irish Council for Social Housing (ICSH) to examine the establishment of SPVs to facilitate investment in the sector. The Department put the bodies in contact with the ICSH with a view to those bodies examining further how they could invest in the sector.
Work has been ongoing between the ICSH, a number of larger Tier 3 AHBs and their financial advisors on the development of a vehicle or mechanism for delivering private financing for AHBs which are providing social housing, in line with commitments under the Government's Rebuilding Ireland Action Plan on Housing and Homelessness. This project involved a number of phases, including engagement with a range of financial institutions. Part of this also involved the AHBs examining models that will facilitate private financing, having regard also to the recent reclassification decision by Eurostat of the larger Tier 3 AHBs earlier this year.
I understand that significant progress has been made with the project. One AHB has already established a Special Purpose Vehicle to enable it access private finance from a financial institution. Further work is on-going to enable the establishment of SPVs, based on the outcome of phases 1 and 2 of the ICSH project and it is expected that there will be further developments over the coming months.
